Dubai cloud kitchen company Kitopi acquires UAE food group AWJ

Dubai cloud kitchen company Kitopi has acquired UAE food and beverage group AWJ for an undisclosed amount as it seeks to expand operations in the Middle East. AWJ is the holding company for brands such as Operation Falafel, Catch 22, Awani and Sushi Do, among others, with operations in Saudi Arabia and franchises in New York and London.

The acquisition is a part of Kitopi’s strategy to invest in and grow regional brands and take them global, it said on Wednesday. “AWJ [has] built some of the region’s much-loved brands, and it is going to be a privilege to continue to innovate, elevate and expand its success,” said Mohamad Ballout, chief executive and co-founder of Kitopi.

Cloud kitchens, also called ghost or dark kitchens, are commercial establishments built to prepare food specifically for delivery.

They have no presence as a restaurant and offer delivery-only services from centralised premises through a mobile app. The concept has taken off in recent years, particularly during the Covid-19 pandemic when lockdowns and travel restrictions kept diners homebound.

The global cloud kitchen market is expected to be valued at $71.4 billion by 2027 from about $43.1 billion in 2019, according to Allied Market Research.

The deal will see AWJ's Dubai group of brands expand in new markets where Kitopi has a strong presence.

The food and beverage group opened its first outlet in Dubai in 2014, and has since expanded its portfolio to more than 10 brands — delivery and dine-in — and more than 32 outlets across the UAE and Saudi Arabia. "We have built on our core fundamentals, raising the bar and setting the business up for a sustainable future. It is now time for a new chapter," said Manhal Naser, group chief executive and co-founding director of AWJ.

Kitopi is "best positioned" to take AWJ to the next level, Mr Naser said. A tech-powered, multi-brand restaurant with more than 100 brands, Kitopi raised $415 million in July 2021 in a funding round led by SoftBank, to expand operations in the Middle East and support its entry into South-East Asia.

Founded in Dubai in January 2018, Kitopi operates in more than 200 locations across five markets — the UAE, Saudi Arabia, Kuwait, Qatar and Bahrain.

It also operates its engineering centre in Krakow, Poland, its global customer experience centre in Dubai, and its robotics base in Odense, Denmark, the company said.